Yes. the are counted as a non-financial asset.A prepaid expense is a considered an asset because it entitles the company to receive a benefit in the future. They a…re normally classified as a current assets because usually the benefits will be obtained within a year or a business cycle; whichever is longer.

If prepaid expanses represents current year expenses then it is current assets in fact, prepaid expenses are current assets. why? this is because you had paid in advance for …the item you want to purhase. eg, if u renting a building which cost u $100000, but u paid $200000, then that additional paid amount is your asset. what is the definition of assets? well, there are 3 component that makes them up. by understanding these 3 component, u can more or less classify items u are not sure. first component, it brings future economic benefits, second you have control over it, and third, it rises from a past event. hopes this help :-)

Prepaid expenses are an asset because you (as the company) is owed something. When you are owed something by another then you list it as an asset until it's paid. … Investopedia also explains it similar to this: While prepaid expenses are initially recorded as assets, their value is expensed over time as the benefit is received onto the income statement, because unlike conventional expenses, the business will receive something of value in the near future.

Prepaid insurance is that amount which is paid in advance forfuture insurance so until actual insurance facility is availed bycompany it is an asset of company and if it is fo…r short term orwill be availed in current fiscal year then it is current assetotherwise a fixed asset, if some portion is usable in currentfiscal year then only that portion will be current asset andremaining will be fixed asset.

This has to do with the matching principle of accounting. Example: A company has a December 31 year-end, but its rental agreement on a building stipulates that a full year of… rent must be paid by the company on December 1 of each year. The payment will cover rent on the building from December 1, 20X1 to November 31, 20X2. The rental payment is $120,000 per year. If the company expenses the full $120,000 payment in its December 31, 20X1 fiscal year, it will be recording an expense for a payment that it will benefit from in the future (access to the rented premises). Instead, 1/12 of the amount is expensed in the current fiscal year (representing use of the premises during December), and the remaining amount is recorded as an asset (Prepaid Expense), because the company will receive a future benefit from it, and it would be incorrect to expense the entire amount in the 20X1 fiscal year.

Insurance is there in the hope that you will never need it! For instance, having your home fully insured would be an asset if your house suffered a fire and was totally gu…tted. But, if you never suffer a fire gutted house, your insurance payments are outgoing payments that are not recoverable.